Course Meeting Times

Lectures: 2 sessions / week, 1.5 hours / session

Course Introduction

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15.567 Course introduction.  


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Course Perspective and Description

Information, especially digital information, is different in many ways from other goods and services. Yet information is still subject to the laws of economics. The purpose of this course is to explore some of the economics of information and understand how they affect strategy, structure and pricing.

We will use lectures, cases, class discussion, guest speakers, exercises, and team projects to examine a variety of topics including: the pricing of information goods, bundling and other forms of aggregation, open source and innovation, search and competition, targeted advertising, information analytics, social networks and information worker productivity, business process replication, and a variety of other topics. Fundamental economic principles will be illustrated using business case studies. At times, we will also discuss emerging digital technologies, business methods and industry structures.

Rapid and radical changes inevitably create opportunities for great wealth creation – and destruction. Business leaders empowered with knowledge of the underlying economic, business and technological principles will be at an advantage in such an environment.

Course Principles and Expectations

Students in the class are co-producers of class discussions and collective learning. For this to happen, class members need to listen carefully to one another and build on or critique prior comments. Many of you have worked in some of the companies we will be discussing or have worked with the relevant technologies. If past experience is any guide, each of you has unique insights and experiences that can help your classmates better understand the issues we are discussing. The discussion should be a conversation in which all participants recognize that they have an obligation to advance our understanding of the issue at hand. Your contributions to this learning process will be appraised in addition to the specific content that you contribute.

Because this course relies heavily on class participation for its success, class norms and expectations regarding class behavior are very important. Attendance at every class is required. Also, please come to class fully prepared to discuss the readings. I create a reading guide for each session with questions that you should review in advance and should be ready to answer.

Students who are thoroughly prepared for each session will benefit the most from this class. What's more, they add to the learning of their classmates. Hence, if you don't feel comfortable with these expectations, then this is not a good course for you to take this semester.

Course Textbooks

Strongly Suggested

Shapiro, Carl, and Hal Varian. Information Rules: A Strategic to the Network Economy. Cambridge, MA: Harvard Business School Press, 1998. ISBN: 9780875848631.

Brynjolfsson, Erik, and Adam Saunders. Wired for Innovation: How Information Technology is Reshaping the Economy. Cambridge, MA: MIT Press, 2009. ISBN: 9780262013666.


Saloner, Garth, and A. Michael Spence. Creating and Capturing Value: Perspectives and Cases on Electronic Commerce. New York, NY: John Wiley & Sons, 2001. ISBN: 9780471410157.

Brynjolfsson, Erik, and Brian Kahin, eds. Understanding the Digital Economy. Cambridge, MA: MIT Press, 2000. ISBN: 9780262523301.

Liebowitz, Stan. Re-Thinking the Network Economy: The True Forces that Drive the Digital Marketplace. New York, NY: American Management Association, 2002. ISBN: 9780814406496.

Varian, Hal, Joe Farrell, and Carl Shapiro. The Economics of Information Technology: An Introduction. Cambridge, UK: Cambridge University Press, 2005. ISBN: 9780521605212.

Sloan Management Review


Class participation 35%
Individual and group assignments 25%
Midterm exam 15%
Team project 25%